In a recent California Court of Appeal decision, Shoen v. Zacarias, the court clarified the circumstances under which a license for land use may become irrevocable. In this case, the court emphasized that the expenditure of money or labor must be "substantial," "considerable," or "great" for a license to become irrevocable. This decision provides valuable guidance for landowners and serves as a reminder of the importance of clearly defining the terms of any license granted for land use.
The dispute between Shoen and Zacarias revolved around a flat patch of land that straddled their respective property lines. Both parties made various improvements and investments in the disputed area, with Zacarias mistakenly believing the entire flat patch was on her land. The Shoen family trust, knowing about Zacarias's encroachment, allowed her to continue using the disputed area in an effort to be a "good neighbor."
However, when Shoen requested that Zacarias vacate the area in 2012, she refused, leading to a legal battle over the land. Zacarias argued that she had an irrevocable license to use the disputed area based on Shoen's acquiescence to her use and her significant investments in improvements and maintenance.
Court Decision and Lessons Learned
The trial court initially granted Zacarias an exclusive irrevocable license to use the disputed area, but the Appellate Court overturned this decision. The Appellate Court found that the trial court used the wrong legal standard in determining the license's irrevocability and that Zacarias's investments in the disputed area were not substantial enough to warrant a perpetual license.
The Shoen v. Zacarias decision offers several critical lessons for landowners:
Granting a license for land use may create a situation where the licensee can expend substantial money or labor in reliance on the license, potentially making the license irrevocable.
To avoid potential disputes and unintended consequences, landowners should grant licenses in writing and explicitly reserve the right to revoke the license at any time, regardless of the licensee's investments in the land.
Shoen v. Zacarias serves as an important reminder for landowners to be cautious when granting licenses for land use. By clearly defining the terms of any license and reserving the right to revoke it at any time, landowners can protect themselves from unintended legal consequences and potential disputes with neighboring property owners.